SIE practice questionmediumETFs
What is an advantage of ETFs over traditional mutual funds?
- AGuaranteed principal protection
- BAbility to trade intraday at current market prices✓ Correct answer
- CNo management fees
- DNo risk of tracking error
Explanation
Why B — Ability to trade intraday at current market prices
A is correct; ETFs trade throughout the day like stocks. B is incorrect—no principal is guaranteed. C is false as management fees exist. D is incorrect—ETFs can have tracking error.
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